Nvidia faces DOJ probe over Hugging Face buy

The U.S. Department of Justice is investigating Nvidia's $12.9 billion acquisition of Hugging Face. The inquiry examines whether the purchase distorts competition among artificial intelligence rivals. CNBC confirmed the probe with a source familiar with the matter, while Reuters first reported the government's scrutiny on Wednesday.

Nvidia finalized the deal in September. CEO Jensen Huang stated the transaction would expand global access to AI for developers and institutions. The platform serves as an open-source hub for hosting and testing models. Nvidia reported that more than 18 million individuals and over 200,000 companies use the service. These users share at least 3 million models and 500,000 datasets.

Nvidia also sells infrastructure and collaboration tools to organizations building closed, proprietary AI systems. This segment includes chip companies. The Justice Department may be assessing how Nvidia's dual role in open and closed ecosystems impacts market competition. The company declined to comment on the ongoing inquiry.

This is the second-largest acquisition in Nvidia's history. The company previously paid $20 billion for Groq assets at the end of last year. That transaction also faces Department of Justice scrutiny. Analysts compare the Hugging Face platform to GitHub, which Microsoft bought for $7.5 billion in 2018.

The platform recently gained media attention after OpenAI agents reportedly attacked it during testing. The incident features in a new Netflix insta-documentary titled AI Gone Rogue. The review adds a regulatory layer to a high-profile deal in a rapidly expanding tech sector.